Welcome to the new Becker-Posner Blog, maintained by the University of Chicago Law School.

03/26/2006

Reply on the Economics of the Iraqi War-BECKER

Thanks for the interested and interesting comments. Let me add a few reactions to the discussion.
I agree that terrorist attacks sometimes (but not always) take time. I presented only a very mild statement that maybe the War reduced the probability of attack since there has been none for five years. Surely, if attacks had come, as in Spain-where it took hardly more than one year to generate a very deadly attack- the War would have been blamed, at least in part. The Spanish attack helped to defeat the government that sent troops to Iraq, and hastened a withdrawal afterwards by the newly elected government. Why Spain and not here?
I do not see how anyone can claim that Iraqis are no better off, despite the continuing number of horrible Iraqi deaths. It can hardly be doubted that the vast majority of Iraqis supported the overthrow of Saddam. I suspect that a similar majority would oppose the quick withdrawal of U.S. troops. That should not be the reason for keeping them, but we should be clear on where Iraqis stand.
William Nordhaus is an outstanding economist, and I have learned a lot from his many original writings. But an estimate of the war's cost of between $100 billion and $2 trillion is hardly a sharply defined basis for decision-making.
The $7 million estimate for a statistical value of life is for young persons taking various risky decisions. Of course, soldiers are volunteers, but so too are men and women who take risky construction jobs, or join the police force. Estimates of the statistical value of life are trying to measure the amount of compensation people require in order to induce them to take on additional life-threatening risks. I should add that different studies come up with different number, and I consider $7 million on the high side.
Posner and I have no NBER paper on the cost of the war- one commentator is confused on this. I assume he means the paper by Davis, Murphy, and Topel that we refer to. They are the ones who consider continuing containment as one alternative to going to war-they also discuss other possibilities. Perhaps as claimed in the comment, they overstate the cost of containment, but surely considering the cost of alternatives is better than concluding about the desirability of the War without discussing any alternatives?
There can be only one Muppy, my former student. The suggestion of insurance on a war is original, but I do not see how a country can take out insurance on fighting a war that runs into hundreds of billions of dollars. There would have to be a large and reliable market where people can bet in aggregate large sums against the government. But various internet betting markets could have wagers on the costs in any year, the number of casualties, whether any WMD would be found, etc. That may be a bit macabre, but it does encourage many alternatives to official estimates of the costs and benefits of fighting a war. Recall that there was a betting market on whether Larry Summers would resign as President of Harvard. Unfortunately, for Harvard and other universities, those betting that he would resign won.

Comments

You can follow this conversation by subscribing to the comment feed for this post.

I do not see how anyone can claim that Iraqis are no better off...At the moment, I would estimate that the Iraqis have a greater chance of being killed or injured, more difficulties finding and maintaining employment, and, given that they are subject to things like "daytime curfews", I'm not even sure that, over all, they have more freedom.Now, it may turn out that they are better off in the long run but, even if the USA had not invaded, the situation might have gradually evolved to where the Iraqis saw the same benefits that the invasion and occupation are supposed to bring them.It can hardly be doubted that the vast majority of Iraqis supported the overthrow of Saddam.If the vast majority had been willing to give up their lives to see Saddam overthrown then he would have been overthrown without US intervention. Either it was not the vast majority who wanted Saddam overthrown (that is, there was a substantial minority of the population who wanted him to remain in power) or the vast majority did not care enough about having him overthrown that they were willing to give up their lives.I suspect that a similar majority would oppose the quick withdrawal of U.S. troops.It may be that the "good" Iraqis want the USA to stay but from the level of violence there are clearly many Iraqis who believe that their faction would benefit from US withdrawal.One thing that made me very uncomfortable about the US invasion is that the Iraqis did not have a say in the decision to invade. If there had already been a revolution in progress and the USA had simply assisted then I could have felt more confident that it was really what the people of Iraq wanted.

I am sure that there are more Muppys in the world, but it is me !!! Thanks for you comment. I think that internet betting markets have similar advantages as government insurance plan that I proposed.

As you mentioned, it does encourage many alternatives to official estimates of the costs and benefits of fighting a war. In addition, I think that this system is better, because people who do not believe government estimates, and oppose to war do not necessarily burden the extra cost for fighting war. Even though they have to pay some money by taxation, they can earn more money from internet betting market to compensate their loss if such market exists.

I'm not following the logic here. If occupying Iraq somehow inhibits terrorism, why wouldn't it inhibit terrorism against Spain, or any other country, as much as against the US?

I do not see how anyone can claim that Iraqis are no better off, despite the continuing number of horrible Iraqi deaths.

Obviously Iraqis are better off in some ways and worse off in others. Doing a cross-personal utility sum for the whole country is problematic to say the least, and could reasonably go either way. That you 'do not see' this suggests willful blindness.

It can hardly be doubted that the vast majority of Iraqis supported the overthrow of Saddam.

Unsupported assertion.

The polls I have seen show opinion about evenly divided, with pluralities or bare majorities on one side or the other.

For example

http://tinylink.com/?l9l7Ja2fRZ

I suspect that a similar majority would oppose the quick withdrawal of U.S. troops.

Why should anyone care what you 'suspect', particularly about a majority similar to one that is itself not established?

That should not be the reason for keeping them, but we should be clear on where Iraqis stand.

It would be nice if we could know that. I don't see why your speculations are of such importance.

Good morning. It's wonderful what we can do if we're always doing.
I am from Afghanistan and , too, and now am writing in English, please tell me right I wrote the following sentence: "Twin mattress sets bedding extra long full sheets duvet comforters bed comforter sets."